Nifty to reach 8000 in next 12-16 months

After a lot of ups and downs over the past two and a half years, CNX NIFTY has finally crossed the 6100 mark. It is looking solid and comfortable. But is it going to stay this way and continue to go up or is this just another one of those pumped up rallies about to deflate.

In my opinion, Nifty is poised go to higher, in fact much higher than the current levels. It should reach a level of 8000 in next one year or so. The reason I say this is because I strongly believe in history repeating itself. Stock markets have a high tendency to follow certain patterns under certain circumstances. The entire field of technical analysis is based on this mere fact.

So which particular trend is Nifty following at the moment?

Shown below is the Nifty price chart for the last 10 years. I have highlighted the late-2005-to-late-2007 price pattern with Red lines and the late-2005-to-present pattern with Black lines.   If you take a close look at the two patterns, you will see how astonishingly similar these are. The black pattern is just a magnified replica of the red one. An upsurge, then a sudden fall, then a moderate rise, then a moderate fall and then again a new upsurge is seen in both of them. It is indeed history repeating itself just in a bigger and broader way. We presently seem to be at a critical inflection point, just like the one at the start of the late 2007 upsurge. If the similarity in the patterns continues, then this bull run should stop no shorter than the 8k mark.

I am definitely going long on Nifty this time!

Shilpesh G
ShowTrend.com